DENVER — Colorado Attorney General John Suthers announced today that his office has filed a lawsuit against Castle Rock-based Loan Modification Solutions; its owners, Robert Auhll (DOB: 9/21/1963) and Nanette Auhll (DOB: 3/7/1963); and the company’s salesperson, Thomas Stefanszky (DOB: 7/23/1962), on suspicion that they defrauded consumers in search of home loan modifications and foreclosure relief in Colorado and other states.
According to the complaint, filed in Denver District Court, Loan Modification Solutions and its principals collected $2,995 upfront fees from homeowners in exchange for loan modification services. The company is suspected of taking in more than $1 million since January 2009. Under Colorado law, companies cannot seek an upfront fee for loan modification or foreclosure relief services. Loan Modification Solutions also is suspected of using deceptive advertisements to attract customers, including promises of a 100 percent money-back guarantee and a more than 90 percent success rate. The company is suspected of largely ignoring consumers’ requests for refunds when they failed to secure modifications through Loan Modification Solutions.
The company also is suspected of falsely advertising that it used “skilled” and “professional” negotiators to secure modifications. According to the complaint, the company did little more than collect documents from homeowners and fax them to their lenders.
“Loan-modification scams prey on distressed homeowners’ desire to save their homes and to find any means to help fix their dire financial situations,” Suthers said. “As is the case with most loan-modification operations, consumers who dealt with Loan Modification Solutions lost not only their upfront fee, but also crucial time they could have used to secure a modification through their lenders.”
The defendants also are suspected of starting up a new business, Principal Financial Partners, Inc., in September 2010 that solicited upfront fees of $3,495 from homeowners interested in reducing their principal mortgage balance. These activities, too, violate Colorado’s consumer protection laws.
Suthers encouraged consumers who are facing or in foreclosure to obtain help from the Colorado Foreclosure Hotline at 1-877-601- 4673 before hiring a private company to try to modify their home loans. If a consumer insists on hiring a private loan modification company, Suthers encouraged consumers to bear in mind:
- It is illegal in Colorado for a loan modification company to charge you an upfront fee. Loan modification companies can only charge you once their services are completed.
- Consumers should be wary of any company that tells you to stop making your loan payments or to stop working with your lender. Failing to make payments could result in a foreclosure.
- Never ignore communication from your lender at the behest of a loan modification firm. Most lenders have loan modification programs that can help you save your home. In some cases, all a borrower has to do is contact his or her lender and provide some current financial information.
- If a company promises to get rid of your debt, they are making a promise they cannot keep.
- Check out any loan modification company you are considering hiring. The Better Business Bureau maintains ratings of businesses. Any company with an “F” rating should be avoided.
For more information on loan modification companies or other types of foreclosure-rescue firms, visit the Office of the Attorney General’s Mortgage Fraud Information Center.